Ten Things Every Small Winery Must Know

There are treats to be had by working in the wine industry and I'm not talking the food and wine that does indeed flow so copiously. Rather, I'm talking about the opportunities I'm fortunate enough to have to share ideas with colleagues and learn from the best.

I had such an opportunity last week when I spent time in Seattle at TASTE Washington. I was invited to sit on a couple seminar panels at the annual celebration of Washington wines. The first seminar was entitled "Marketing wine in 2010 and Beyond". I had the pleasure of addressing numerous members of the Washington wine industry on this question along with colleagues Paul Mabray of Vintank and Liem Le of Nielsen.

My 20 minute talk boiled down to this:

THE TEN THINGS EVERY SMALL WINERY MUST KNOW TO MARKET IN TODAY'S WINE MARKETING UNIVERSE.

The premise was: While wholesalers and distributors once occupied the center of the wine marketing universe for years, today the consumer occupies that position and any small winery that does not base their marketing efforts on that fact will find themselves running uphill.

This premise is unassailable I believe. But that's not important. What's important are the 10 Things every small winery must know and do to succeed. Here is an abbreviated and distilled presentation of what I told those Washington wine industry professionals I had the pleasure of addressing and speaking with:

1. Know Thy Self
Be able to succinctly communicate your brands value proposition. Be able to explain to individuals and small groups what makes your winery and product line up distinct and unique from the other 6000 wineries in the U.S. This distinction will form the foundation of all your marketing and branding efforts.

2. Listen To The Conversation
The single biggest change in the wine marketing world over the past 20 years is that today consumers are talking about wine—publicly. If you listen to all the various conversations happening in various places on the web, you will learn how consumers drink wine, where they drink wine, when they drink wine, what they want from wines, why they pay what they pay for wines, and everything else in between. By listening closely and daily to these conversations you have an advantage that marketers did not have 20 years ago: regular and intimate access to what you customers want. They'll tell you have to reach them. Listen!!

3. Talk To Your Customers
Because good marketing is largely meeting the expectations of your customers, you need to talk to them simply because they expect to talk to you. The technology exists for consumers to address the principles of any winery directly—and they will. Talk back to them on Twitter, on Facebook, on Blogs, in emails. If you do this regularly and honestly, you will be rewarded with sales.

4. Build Your Mailing List
The mailing list is the single most important tool a small and medium sized winery can possess. When it is carefully built and developed into a customer database that can be sliced and diced and segmented in any and all ways, you'll have the tool that will create the foundation for success. So build it any way you can, keep it clean and use it to carefully address your customers.

5. If You Don't Have A Tasting Room, Get One
Not only is it the location where you'll sell wine at the greatest margins, it is the place you'll create evangelists for your wines that will talk them up in your absence. It's where you'll build your wine club. It's where you'll build your mailing list. It's where you'll learn the most about how your customers react to you products and brand message. If you don't have one either build one or join a co-op.

6. Hire A Great Director of Customer Relations
Not a VP of Marketing. Not a Director of Sales. Not a Director of Hospitality. The Director of Customer Relations will be your most important hire after Winemaker. This is the person who understands and embraces your brand message. They know where the conversations are happening. They know how to converse and listen. They know how to use Twitter. They know how to build a following on Social Networks. They know how to build, maintain and mine a customer data base. They know the birthday of the daughter of your best Chardonnay customer. They know the importance of sending a bottle of wine or an email to your best Syrah customer to congratulate them on getting new job. A great Director of Customer Relations will make or break your brand.

7. Use the Media To Your Advantage
Customers, accounts and wholesalers all still want a third party endorsement for the wine choices they make and the wine media is still the endorser of choice. Sending samples to the media to obtain reviews that endorse your wines and that can be used in communications with customers is the safest way to give your customers what they need. In addition, reach out to the media simply to know them. Read them, comment on their work, start a conversation with them, know them. By doing this, you become a resource for them. You become part of their line of sight. You build the foundation for future coverage.

8. Self Distribute
Few wineries will be able to sell all their inventory direct to consumers. They need to reach out to restaurants and retailers. The technology, services and logistics exist today to self distribute in a number of states. I suggest self distribution over distributor sales because it gives you more control, but also because the skill and talent needed to do a good job of self distribution are the same as those needed to sell well direct to the consumer: the ability and willingness to create one on one and intimate relationships with others. You'll need to be on the road or hire a road warrior. But, again, the software, the services, the communication technology and the logistics exist to facilitate a robust and successful self distribution network.

9. Support Liberalization Of The Three Tier System
The three tier system was developed before there was a consumer centric wine industry and before there were 6,000 domestic wineries. At its strictest, where direct to consumer sales and self distribution is prohibited, the three tier system hinders the success of small wineries. By supporting organizations and efforts that liberalize the three tier system you support your success. Supporting liberalization of the three tier system you support your own brand's profitability and long term success.

10. Make Demands of Your Wholesaler
Many small wineries will contract with wholesalers in their home state and other states. The biggest mistake wineries make when working with wholesalers is selling them a pallet or half pallet or quarter pallet of wine to them hoping the wholesaler sells the wine. If you really want them to sell your wine after they buy it, you'll need to demand they do so by staying in touch with them regularly. Demand they use the sales materials they get form you. Demand they deliver regular depletion reports. Demand they take time to work with you wine yo are in the market. Demand you have the opportunity to communicate with sales people. If you don't do these things, the likelihood is that your wines will languish in their warehouses as they focus on larger brands.


18 Responses

  1. Kevin Cedergreen - March 29, 2010

    Tom
    Attended the seminar Saturday and thought it was great stuff from all the presenters. Nielsen info, 10 Rules for Dating My Wine and Vintanks Virtual i-Phone POP info were all scintallating. A rule or two I differ with. Part of my resistants to bloggos and tweets is the inertia that develops around wine as fashion or “vin populi”. Presenting a wine or an opinion about a wine that is outside the zeitgeist can leave you savaged by the pack, hurt your bottom line and make you weep in your pillow at night. All the bloggers and tweets are certainly entitled to their opinion but at times listening to them will saddle you with the next common wisdom of producing a Chardonnay, Merlot or Syrah just as that wine comes to the end of it’s 15 Minutes of Fame. Listen to your customer, your palate and your brain. Thanks for the show.

  2. Fred - March 29, 2010

    Excellent, Tom. Truly.
    I would add that, finding one’s point of difference (#1) need not be appellation- or product-based. In fact, to be “distinct and unique from the other 6000 wineries in the U.S.” it almost can’t be.
    P.S. I think you meant pallet, not palate.

  3. Mark's Wine Clubs - March 29, 2010

    Tom,
    Good suggestions as a whole. I do think it is important for small wineries especially to spend the resources on having a tasting room, even if it is only open on weekends and can only fit 5 people….it’s that level of customer service which should make people long term members of their clubs.
    I think it also benefits them to have as many outlets for the wine as possible. Don’t give your distributors all the power in the world. If a wine of the month club (yes like my own) wants to work with your brand to ship even 5 cases of wine, I think it makes sense to do so directly instead of forcing them to go to your distributor…especially when the distributor had nothing to do with the original introduction.
    Above all small wineries, like any small business really, need to keep an open mind and use their smaller size to all themselves to change with the times more quickly then their larger competitors.

  4. Sean P. Sullivan - March 29, 2010

    Tom, a pleasure meeting you at Taste Washington this year. Hope you enjoyed the event.
    I would like to commend you on the presentation on Saturday and this post today. As someone who talks to people at wineries in Washington regularly, I wanted to stand up and applaud after each of these points during the presentation. However, I didn’t want to be dragged away before you finished, so I restrained myself.
    While many of these points may seem obvious in theory to the small wineries all around Washington State and elsewhere, they are simply not doing many of them in practice. For all of the wineries out there asking for a roadmap to get through good times and bad, here it is laid out as plainly as can be. Take each of them to heart.
    While I am sure many of the wineries represented at the seminar got a lot out of the presentation, as someone noted to me afterward, what about the hundreds of wineries that weren’t there? To me, this goes to point #2, “Listen to the conversation.” Many are simply not, whether it is about the industry in general or their winery in particular. As I often say, sometimes it seems you can’t even lead a horse to water.
    Thanks again and look forward to seeing you at WBC.

  5. Alec White - March 29, 2010

    Tom,
    Maybe this is just an issue with me (or people my age) but the dark background you use makes it difficult to read your text. On some days–like today’s posting–I copy and paste the text to a word document so I can read it easier.
    My only beef. Keep up the great work.

  6. @nectarwine - March 29, 2010

    Tom, it was great meeting you. Thanks for the beer. Having missed the presentation, I am thrilled you posted it here. Each point is spot on!
    Josh

  7. Marcia - March 29, 2010

    Thank you, as always, for the fine advice. And a smile for #9. Keep at it.

  8. agoodic - March 29, 2010

    Good suggestions as a whole. I do think it is important for small wineries especially to spend the resources on having a tasting room, even if it is only open on weekends and can only fit 5 people

  9. Gene Dexter - March 30, 2010

    Thank you for posting! So much work to be done among smaller houses. Thinking outside the box will be key to future success.
    Here is a little contribution from the music industry we submitted on behalf of friends @ Dusted Valley & Kennedy Shah, dussek, etc. The urban market thrives! And it has fun! Cheers:


  10. china wholesale - March 30, 2010

    Excellent, Tom. Truly.
    I would add that, finding one’s point of difference (#1) need not be appellation- or product-based. In fact, to be “distinct and unique from the other 6000 wineries in the U.S.” it almost can’t be.
    P.S. I think you meant pallet, not palate.

  11. 8gb mp4 player - March 31, 2010

    Good suggestions as a whole. I do think it is important for small wineries especially to spend the resources on having a tasting room, even if it is only open on weekends and can only fit 5 people

  12. Mike Lempriere - April 3, 2010

    I must take exception to the rule “open a tasting room”. This implies a remote tasting room, where the customers are.
    Wine is not a beverage, it is a story — it’s all about the romance. The whole point is to get to know the vineyard and winery. With most WA wineries, you don’t get to know the vineyard as it’s 350 some-odd miles away from the winery, so that’s already out. The only thing left for romance is the winery itself. If the customer cannot see grapevines, they’ve got to at least see barrels, pumps, maybe even red wine stains on concrete. This is what makes wine genuine and unique — it’s the story more than the beverage.
    By all means, open a tasting room — at the vineyard and/or the winery.

  13. medieval clothing - April 14, 2010

    Wine is not a beverage, it is a story — it’s all about the romance. The whole point is to get to know the vineyard and winery. With most WA wineries, you don’t get to know the vineyard as it’s 350 some-odd miles away from the winery, so that’s already out. The only thing left for romance is the winery itself. If the customer cannot see grapevines, they’ve got to at least see barrels, pumps, maybe even red wine stains on concrete. This is what makes wine genuine and unique — it’s the story more than the beverage. – wow..

  14. george parkinson - April 16, 2010

    late in the game on this one Tom, but just the same, great advice; added it to my favorites and pasted it to my fridge, enough said. think I’ll go out and build my brand now. wish me luck. Pennsylvania AVA Bucks County country-side rustic style wines highlighting the wonderful world of hybrid grapes: Corot Noir, Noiret, Traminette and Seyval Blanc. hows that for 30 seconds?

  15. china wholesale electronics - April 20, 2010

    I would add that, finding one’s point of difference (#1) need not be appellation- or product-based. In fact, to be “distinct and unique from the other 6000 wineries in the U.S.” it almost can’t be.

  16. JonAllerton - April 20, 2010

    WOW!! Have you seen this new wine blog?? A fascinating read. Take a look …read about older wines.
    http://magnifiqueviellesvins.wordpress.com/2010/04/20/welcome-to-the-inaugural-edition-of-magnifique-vielles-vins/

  17. china prom dress - May 4, 2010

    Thank you, as always, for the fine advice. And a smile for #9. Keep at it.

  18. [email protected] - November 10, 2011

    Tom,
    I will be starting a very small wine making operation in 2012 on the Olympic Peninsula. I read your recommendation about self-distributing. Is this legal in the state of Washington? I’ve tried to track this down on the LCB website, without success.
    Thank you for your helpful suggestions.
    Kenneth Collins
    Marrowstone Vineyards


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